President Joko “Jokowi” Widodo has called for periodic evaluation and monitoring to industries which have received incentives on gas prices.
“For industries which fail to meet good performance and set targets, disincentives or sanctions will be imposed,” the President said in his introduction in an online limited meeting on the Adjustment of Gas for Industries and Non-Subsidized Fuel Prices, Wednesday (18/3).
Regarding gas price for industries, according to the President, the issue has already been discussed on 6 January resulting three options to be weighed.
“First, reducing or even eliminating government quota. Second, imposing the domestic market obligation (DMO) policy, applying import-free policy for gas for industries,” the President said.
For this reason, the President has also called for a thorough calculation and evaluation to industries that receive gas prices reduction.
“Incentives given to industries to reduce gas prices are expected to have a significant impact and provide added value on the economy,” he said.
The President also expressed hope that industries can increase their production capacity and boost their investment.
“Industries are expected to create more jobs and increase production efficiency; thus, their products can become more competitive,” the President said.
The Government has announced it will provide incentives on gas pricing for industries, Minister of Finance Sri Mulyani said.
The measure to reduce gas prices, she added, will certainly affect the State Budget; thus it should only be given to companies with good performance, she added.
According to Sri Mulyani, industries with good performance including those who have positive margin, create large job opportunities and are obedient and timely to pay taxes.
Previously, Minister of Energy and Mineral Resources Arifin Tasrif said that gas pricing for downstream industry can be lower as long as other fees, including transportation and distribution fees, are reduced.
With that being said, Sri added, to minimize the State Budget losses due to incentives for several fees, the Government should reduce subsidies on electricity and fuel.
“Subsidy should only be granted to industries with great impacts for economic justice,” Sri said, adding that Ministry of Finance will work with Ministry of Industry to review the impact of this policy for companies.
Meanwhile, President Joko “Jokowi” Widodo has called on his Cabinet Minister to oversee the impacts of the drop in global crude oil prices on the country’s economy.
“We’ve learned that world oil prices are now declining to roughly below US$30 per barrel and I call for calculation of its impact on the economy,” the President said in his introduction in an online limited meeting on the Adjustment of Gas for Industries and Non-Subsidized Fuel Prices, Wednesday (18/3).
“Do calculate how long this decline will occur, then the estimated price going forward,” he added.
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